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Staying organised during a tax investigation

  • Blog
  • 27 February 2018

During a tax investigation, your business will be called upon to reply to a number of queries from HMRC. This is to help provide evidence and answer any questions about your business’ financial situation that they might have.

Throughout an investigation, it is important that your business remains organised, not just in terms of being able to respond to the investigation but also to allow it to continue to operate as effectively as possible.

Staying organised during a tax investigation

Organising your operations

During your investigation, you may find that you have to spend an increased amount of time away from the day to day running of your business in order to work with your accountant and handle information requests from HMRC.

This prevents you from being as hands-on with your business as you might be used to. In these situations, it is important that you have a team in place that you trust and can rely on in order to keep your business running.

When you learn about the investigation, have a meeting with your management teams, let them know what is going on, and put a clear structure in place to help them run your business while you focus on the tax investigation.

This could involve:

  • Deciding which of your daily or weekly tasks other staff members are responsible for
  • Identifying when to communicate issues back to you
  • Defining the hierarchy of who is in charge while you aren’t present

Putting these steps in place can give you some peace of mind when it comes to the daily operations of your business.

Organising your financial information

HMRC will call upon information from a variety of different places to work out the tax situation for your business.

This can include:

  • Bank statements
  • Chequebooks and paying in slips
  • Credit card statements
  • Sales invoices / Till rolls
  • Job quotes or estimates
  • Purchase invoices and expense receipts
  • Payroll records
  • VAT records

Keeping each different element of your financial information organised through the year is important. Keeping detailed records allows you to find any information HMRC requests quickly.

You should keep your records on a monthly basis, with everything organised by type. In turn, these monthly records should then be filed by year giving you a complete record of your business.

Being organised in this way allows for a much greater level of responsiveness when it comes to providing the information you are asked for.

How can FSB help with tax investigations?

FSB provides automatic access to tax investigation advice and insurance services as part of its Business Essentials package.

This can help to protect you and your business if you’re subjected to an investigation by HMRC. It can also  help you to keep your business running while the investigation takes place.

The service provides access to a number of benefits, including:

  • Cover up to £100,000 per individual claim
  • Representation from former tax investigators, who will liaise directly with your accountant
  • Access to a tax advice helpline
  • Tax investigation insurance - the policy covers any fees we’ve agreed with your accountant

To learn more about tax investigation, or how our protection service can help your business, please visit the FSB Tax Investigation Protection page. Or visit our package comparison page to see our other packages and the different ways FSB could benefit your business.

FSB Tax Investigation Protection from FSB

Tax advice & investigation protection from the FSB

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